Case1: Portable Fun Instruments
Yash Gupta is the founder and president of Portable Fun Instruments (PFI), a company that hashad great success in the handheld game market. Its first products were dedicated handhelddevices that each offered a specific game, such as backgammon, checkers, or chess. As thepower of microprocessors for handheld devices grew, and the size and cost of those microprocessors shrank, PFI was able to build better and more complex games into its devices.Today, PFI offers a wide variety of dedicated handheld devices on which users can playcard games, adventure games, and sports simulations, and solve various kinds of puzzles. Mostof the elements in the game displays are graphics, not words. This helps PFI sell the devices inmany different markets around the world without having to build separate interfaces for eachlanguage. PFI's game devices have retail prices that range between $20 and $40, but theretailers and distributors buy them from PFI for prices that range between $4 and $18.
PFI is profitable because Yash has worked hard to keep development and production costslow. Most of the programming is done in Bangalore, India, and the devices are built in production facilities located in Xixiang, China, and Penang, Malaysia. Although Yash has beensuccessful in controlling production costs, he worries about continuing to operate the companywith a long-term strategy that requires PFI to build a new physical device for each sale. Thelarge retail chains that have become PFI's main customers are always asking for discounts andreduced prices on new orders, and production costs are creeping upward even though the facilities are located in some of the lowest-cost areas in the world.
Yash wants to explore the potential PFI has for moving its games to other platforms. PFIhas translated some of its games to run on smart phones, but the results have been disappointing. Until recently, most smart phone users have been businesspeople who use their smartphones for e-mail, appointments, address books, travel expenses, and other data-managementfunctions. These users are not avid game players, and sales of PFI's games for these platformshave not been strong.
Some of PFI's marketing team members have been telling Yash about the success ofApple's iPhone and the online store for software that runs on that phone (called Applications foriPhone). Apple shares the revenue earned from software sales on its site with the developers ofthat software. Other team members have mentioned Google's Android operating system forsmart phones built by a variety of manufacturers. Software for those phones sells in the AndroidMarketplace, which operates in much the same way as Apple's software store, sharing revenuewith software providers.Yash has hired you as a consultant to investigate the Apple iPhone and Android Marketplace as options for selling versions of PFI's games that will work on smart phones.
Required:
1. Use the links in the Web Links for this case, your favorite search engine, and resources inyour library to learn more about Android and Apple as program delivery systems for smartphones. Prepare a 300-word executive summary for Yash that describes each deliverysystem you identify and outlines the current or likely near-term availability of each systemfor content providers such as PFI.
2. Prepare a report for Yash and the PFI executive team in which you outline and analyzethe strengths and weaknesses of each content delivery system you have identified. Yourreport should conclude with a specific recommendation regarding the suitability of eachcontent delivery system for PFI's games. This report should be about 300 words in length.